The Defence ministry is currently in the process of framing a new blacklisting policy.
What is blacklisting in defence sector?
Blacklisting of defence companies relates to, preventing those firms that are found to have resorted to unscrupulous means to acquire the defence deals from the government, from participating in future defence deals
At present, 15 entities, including six foreign firms, are blacklisted by the Ministry, while 23 others are under the scanner
Instead of blanket ban used in previous policy government is considering graded blacklisting
Negatives of Blanket ban
Unavailability of certain weapon systems when only one company manufactures that particular system.
In complex defence acquisitions like fighter jets and submarines, many companies may be involved as component manufacturers. In such a situation, blacklisting even one among them will lead to incomplete weaponry being delivered. This compromises the capability of the weapon system.
The new submarines being acquired by the Indian Navy under the P-75 programme, developed by France’s DCNS will be without torpedoes for a long period of time, because of the blacklisting of WASS, a Finmeccanica company.
Provisions expected in the new blacklisting policy:
New norms are expected to be a mixture of heavy fines, graded blacklisting and other penalties.
Instead of blocking a business from defence deals, India will impose an economic penalty on the company
The defence ministry is in favour of allowing those companies that have already been blacklisted, to participate in defence projects so long as they agree to deferred prosecution.